Fresh power arrangement

With the mid-term elections just a few days away, or halfway through this single term of our leader Benigno Simeon (aka BS), business now broods over his possible stance in the next three years.

One, will he follow the ways of others before him, instantly becoming a lame duck president after the elections, just coasting along? Or, two, will he damn everybody—and everything else, including his love life—and pursue some unfinished items in his reform agenda?

After all, in his campaign back in 2010, our leader BS talked a lot about honest governance (i.e. “daang matuwid”) and prosperity (i.e. “walang mahirap”), which down here in my barangay really just meant that we would have real jobs.

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Now the guys down here actually expect him to leave us a lasting mark, particularly since in 2010 we voted for him, rather overwhelmingly, because of his reform agenda.

Me thinks the Aquino (Part II) administration still has hard work to do in foreign policy, such as the Sabah issue, territorial dispute with powerhouse China, or the thousands of displaced OFWs in war zones abroad.

Internally, the administration must face up to problems of high criminality, interspersed with threats of terrorism from extremist and Marxist groups, and some minor points like hunger, poverty and joblessness.

To think, the Office of the President can have vast power, if our leader BS chooses to wield it to fulfill his promises, as shown by former President Fidel Ramos during the power crisis in the 1990s when Kuya Eddie personally badgered Congress for “emergency powers.”

Besides, if we are to accept as credible the surveys done by SWS and Pulse Asia, which politicians are starting to question in and outside the courts, our leader BS still enjoys an enviable trust rating of 72 percent.

Perhaps he can confidently fight some powerful business groups, for instance, in solving the ongoing power crisis in Mindanao, which still suffers from eight-hour long power outages, or perhaps even in preventing an impending one in Luzon.

In a gathering in Davao City in 2010, our leader BS indeed vowed to end the Mindanao power crisis by building non-fossil clean power plants, but recently business noted that little has been done, of course with devastating outcome for the economy.

Businesses are projecting losses of P300 million due to the long power outages. According to the GenSan Chamber of Commerce and Industry, just one region known as Soccsksargen (South Cotabato, Cotabato, Sultan Kudarat, Sarangani and General Santos City) loses around P100 million a month.

The Mindanao Development Authority even reported that the business losses in the Soccsksargen and Zamboanga are heavier than those in other regions because the two areas do not have reserve power capacity.

To think, in Lanao del Sur, the P25-billion hydro power plant project of Agus 3 Hydropower Corp., or Agus 3 HC, has been hanging for the past two years because of inaction by the Department of Energy.

From what I gathered, during the time of Cabinet Secretary Jose Rene Almendras, who used to be the finance man of the Aboitiz group, Agus 3 HC president Saidamen Pangarungan pleaded with the DOE to pursue the project.

The DOE under Almendras dropped it, and so the proponent reopened its case with the DOE when Almendras was promoted to the newly invented position of Cabinet Secretary and former Leyte governor Carlos Petilla became DOE head, who unfortunately continued to sit on the vital power plant project.

According to Pangarungan, his company already met the government’s kilometric list of requirements for the project, including its acquisition of the 80-hectare site, and permits from the DENR like the environmental clearance certificate, the National Water Resource Board, the National Commission for Indigenous People, and even the LGUs to the last barangay. Moreover, the company forged power purchase agreements (PPA) with electric cooperatives in Mindanao, and it firmed up the financing, meaning direct investments and loans.

But the DOE dribbled the project in the past two years. Almendras and company decided that the project would have to be privatized through a public bidding. Never mind that, as the company noted, the government never put a single centavo in the project, in the first place, and so Almendras wanted to privatize something that the government did not own.

As a result, according to Pangarungan, Mindanao must wait for the completion of the 300-megawatt coal power plant of the Aboitiz group, which would not happen until 2015.

In the meantime, Mindanao must suffer high power rates, since the DOE under Almendras decided to have a fresh arrangement with the Aboitiz group to add power capacity through the prohibitive diesel plants of the group.

Here is the simple math: the power rates of diesel plants are about P14 per kwh, while those of coal plants are about P7 per kwh, but as for hydro plants they are as low as P3 per kwh.

Really, what is the meaning of all that—for whom did Almendras work?

Anyway, the same problem may hound Luzon soon, and the problem is already spooking locators at the Subic free port, according to the Subic Bay Freeport Chamber of Commerce. Luzon really needs new power generation facilities by 2016 —or just in time for our leader BS to make his grand exit—which will only be three years from now.

Based on the 19-year plan of the DOE, the island of Luzon alone will need additional power capacity of more than 10,000 megawatts by 2030. To top it all, in three years or in 2016, Luzon needs new capacity of 600 MW.

Unfortunately, the Court of Appeals just shot down an important power project at the Subic free port, the 600-MW plant of Redondo Peninsula (a.k.a. RP Energy), a consortium made up of Meralco PowerGen, Aboitiz, and Taiwan Cogeneration.

From what I gathered, a party list group known as Kabataan wanted to stop the coal plant project, having gone to the CA for an issuance of the still unexplained concept called “Writ of Kalikasan.”

While the CA threw away the petition for the writ, the court decided nonetheless to cancel the ECC issued by the DENR to RP Energy, plus the lease development agreement (or LDA) that the company forged with Subic Bay Metropolitan Authority.

Why? Well, according to the court, due to wrong procedure!

But the ruling also creates ripples throughout business, and not only in the power generation sector. The ruling in effect tells the business community that the court indeed can cancel the numerous ECCs and the LDAs in Subic free port that the government issued in the past. Is that it?

And the way things look in this country under our leader BS, any fake environmentalist can just challenge those ECCs and LDAs in court, and—presto—they can be cancelled.

Now, in 2015, the world will be watching this country as we host, for only the second time, the Asia-Pacific Economic Cooperation (Apec) meeting, which will naturally be an opportunity for our country to show to the whole world that we mean business.

Down here we shudder to think that our leader BS would not use his vast power to solve a first-class power crisis about to happen in this country.